Question

Julio invests $6,100 into an account that earns 5.2% annual compound interest. If Julio makes no additional deposits or withdrawals, which best represents the amount of interest Julio will earn after 8 years?

A $15,250.73

B $2,120.73

C $3050.73

D $9150.73

Answer 1

D) $9150.73

Explanation:

Simple compound irate =

principal*growth rate^years

or

V(t) = p*g^t

Where g = 100% + the given growth rate,

in this case, 5.2%

So,

V(8) = 6,100*1.052^8

V(8) = 9150.73